The IPO is the government office responsible for the registration and licensing of patents and trademarks. It does not handle copyrights, however.

It is headed by a Director General, who is assisted by two (2) deputies. Beneath them are six (6) bureaus: Patents; Trademarks; Legal Affairs; MIS and EDP; Admin, Financial and Personnel Services; and, Documentation, Information and Technology Transfer.

The Director General manages all the IPO's functions and has exclusive appellate jurisdiction over decisions of the directors of Legal Affairs, Patents, Trademarks and DITT. This means that a case decided in any of these bureaus must be appealed to the Director General (you' can't go to the regular courts -they'll dismiss your case.) If a case from the Legal Affairs, Patents or Trademarks gets and unfavorable ruling from the Director General, you have to appeal to the Court of Appeals under Rule 43 of the Rules of Court within fifteen (15) days after you received the decision. If the Court of Appeals' decision isn't favorable, you have to go to the Supreme Court under Rule 45 Certiorari of the Rules of Court. Again, you have 15 days after you received the Court of Appeals' decision to go to the Supreme Court.

Appealed decisions from the DITT are further appealed from the Director General to the Secretary of Trade and Industry. The same thing happens in case of license disputes. You can't appeal a license dispute to the courts. It must go to the IPO Director General.

The Legal Affairs Bureau has the following powers:

1.) Deciding cases on opposition to the application for registration of marks; cancellation of trademarks; cancellation of patents, utility models and industrial designs; and, compulsory licensing of patents. Regarding cancellation of patents, utility models and industrial designs, highly technical matters require investigation by the director of Legal Affairs and two (2) experts.

2.) Hold original jurisdiction in administrative cases involving the violation of rights in intellectual property law, so long as the damages claimed are at least Php 200,000. Note: original jurisdiction and exclusive original jurisdiction aren't the same. "Original" means the case starts in that office, but can also be taken up in court. "Exclusive original" means only that office can take the case and starting it in a court won't do. The Legal Affairs Bureau can also use provisional remedies, like contempt.

3.) Impose the following penalties:

a.) Cease and Desist Order

b.) Accept voluntary assurance of imposed compliance or discontinuance

c.) Condemnation or seizure of the products involved in the offense

d.) Forfeit the materials and real and personal property involved in the offense

e.) Fine of Php 5,000 to 150,000 plus up to Php 1,000 for every day of continued violation

f.) Assessment of damages

g.) Censure

h.) Withholding, cancellation or suspension (up to 1 year) of permits, authorities or registrations granted by the IPO

i.) Other related penalties and sanctions.

The Recto and Maceda Laws

These two laws are relevant and are very often the issue of many court cases. Both laws govern the sale of property by installments. The Recto Law, which forms part of the Civil Code, covers installment sales of personal property while the Maceda Law governs installment sales of real property.

The Recto Law

The Recto Law comprises Articles 1484 to 1486 of the Civil Code. It was added to the Civil Code to prevent abuses in the foreclosure of chattel mortgages, such as when mortgagee-creditors foreclosed mortgaged property, bought them at a low price (on purpose,) then prosecuted the mortgagor-debtors to recover the deficiencies.

In the event a buyer of personal property defaults by failing to pay two or more of the agreed installments, the seller can do any of the following:

1.) Demand that the buyer pay (a.k.a. specific performance)

2.) Cancel or rescind the sale

3.) Foreclose the mortgage on the property bought (if there ever was a chattel mortgage)

Regarding no. 3, this happens when a person takes a loan to buy something and he mortgages the thing he bought to ensure the creditor that he will pay the loan. Remember: If you choose one remedy, you can't choose the others. These remedies, believe it or not, are also available to the buyer. You also can't use all or any of them at the same time. The Recto Law also won't apply to a straight sale (i.e. a sale where there is a downpayment and the balance is payable in the future in a single payment only.) The seller can also assign his credit to another person, making that person the new creditor.

If the buyer refuses to surrender the items to the seller, he becomes a perverse buyer-mortgagor. When that happens, the seller can recover expenses and attorney's fees.

The Recto Law also covers leases with the option to purchase.

The Maceda Law

The Maceda Law, RA 6552, is the real estate equivalent of the Recto Law. Like the Recto Law, it also covers financing of sales of real property (which is why mortgages also come in.) It doesn't apply,however, to the following sales:

1.) Industrial lots

2.) Commercial buildings and lots

3.) Lands under the CARP Law

Depending on when the buyer defaults, there are two (2) possible scenarios: if the buyer paid at least two (2) years' installments and if the buyer paid less than 2 years' installments.

If the buyer paid less than 2 years' installments and defaults, he is given a grace period of sixty (60) days starting from the date of his last installment to resume paying. This period can be increased by the seller. If after the grace period the buyer still can't pay, the seller must make a notarial demand to cancel the sale. The cancellation becomes effective thirty (30) days after the buyer was notified. So it's possible that the buyer could be notified two months after the 60-day period and then the 30-day period will begin.

If the buyer paid at least two years' installments, the buyer can pay the unpaid balance without interest. The grace period is computed at one (1) month per year of installment payments. It also begins from the time the buyer paid his last installment. The grace period can be used only once every five (5) years of the sales contract's life -including its extensions. So it's possible to have a grace period of a year if the buyer had been paying his installments faithfully for 12 years. Once the buyer chooses to use the grace period, he can't get it again until another five years are over.

If the seller wants to cancel the sale, he has to refund the buyer of 50% of the actual payments. If the buyer paid more than five years' installments another 5% for every year is to be added to the refund, but only up to 90% of the total payments made. The payments mentioned here include the downpayment, options and deposits. The refund is made in this way: if the buyer paid more 2 to 5 years' installments, he can get back 50% of the cash surrender value. If he paid for more than 5 years, he can get the 50% plus 5% per year up to 90%.

The buyer is also allowed to make advanced payments, or even the full price, without interest. He can also assign his rights to another person, making that person the new buyer, but he can only do that with a notarial deed of sale assignment.

The Maceda Law cannot be used by a real estate developer (see here.) It also cannot be used by the highest bidder in foreclosure proceedings.

Real Estate Mortgage Specifics

We already know that when you mortgage real estate, it's because you borrow money and put up some real property to guarantee that you pay your debt. The transaction is then registered. Now, here are some other things that you should know:

1.) In a foreclosure sale where the income is less than the amount in the debt, the mortgagee/creditor can sue the debtor/mortgagor to recover the remaining balance. If the income of the sale is more than the amount in the debt, the extra amount must be returned to the debtor/mortgagor.

2.) Even if the contract contains a provision that says the judicial foreclosure will be filed in another place if the debtor/mortgagor fails to pay, the property may be foreclosed extra-judicially and sold in the place where it is located in case of failure to pay.

3.) An extra-judicial foreclosure is valid if:

A.) Its notices are posted in at least three (3) public places and it is published in a generally circulated newspaper once a week for three (3) consecutive weeks.

B.) Even if there was no posting but there was publication, the foreclosure is valid because there is a greater chance the public will be informed of the foreclosure.

4.) An extra-judicial foreclosure is void if:

A.) It is postponed and the notice is waived by the mortgagor/debtor.

B.) Both forms of notices aren't made.

C.) If after the three (3) consecutive notices are published, the sale is postponed and later only one or two new notices are made.

5.) The redemption period of one (1) year isn't interrupted if the foreclosure sale is questioned in court.

6.) If the property is sold in a foreclosure sale, the buyer must ask the court to issue a writ of possession before he can take over the property. If he doesn't, the mortgagor/debtor can file an ejectment suit against him. A writ if possession can't be denied if there is an ongoing action to annul the foreclosure or the real estate mortgage. Applying for a writ doesn't need the presentation of evidence.

7.) If the property was also under a lease to another person at the time it was foreclosed, the mortgagee/creditor can still get a writ of possession even if the lease contract is still effective except if the contract was registered or if the mortgagee/creditor knew that there was a lease that was still in effect.

8.) If the mortgagor/debtor sold the property to someone else before it was mortgaged, the mortgagee/creditor can't ask for a writ of possession because it would be a constitutional denial of due process.

9.) If the mortgagor not only fails to redeem the property but also refuses to surrender the title certificate to the buyer in the foreclosure sale, the court can order the Register of Deeds to register the deed of sale so the buyer can consolidate his title.

RA 9344: The Juvenile Justice Welfare Act of 2006

"This is a crazy law!" roared my criminal law review professor, a retired prosecutor, when we were discussing RA 9344 in relation to Exempting Circumstances. Another criminal law professor, a judge, was less forceful but equally severe in his condemnation. He even sent a recommendation to Congress to have it reviewed.

So what is it about RA 9344 that angers prosecutors and worries judges?

RA 9344 was the brainchild of Senator Francis "Kiko" Pangilinan. Although a reform-minded, well-intentioned person (very rare in Philippine politics,) he sponsored a law that unfortunately became highly controversial due to its treatment of minors committing crimes. His intention for introducing RA 9344 was to help rehabilitate child criminals. The results, however, have been anything but encouraging.

Under the old provision of the Revised Penal Code, a child aged nine (9) or below was exempt from criminal liability and a child aged between 10 to 15 was exempt if he acted without discernment (meaning without any reflection) and had a mitigated responsibility if he did act with discernment. If the child was aged between 16 and 18, he had a mitigated responsibility.

What RA 9344 did was exempt all minors aged 15 and below from criminal liability and minors aged 16 to 18 were declared exempt if they acted without discernment and modified the penalty if they did act with discernment.

Civil liability remains in all cases but those children without criminal liability are automatically released. Children aged 16 to 17 who acted without discernment are exempt from criminal liability. Regarding those children aged 16 to 17 who acted with discernment, a set of procedures has been prescribed as follows:

1.) If the penalty is lower than 6 years:

A diversion program for the child is prepared by the barangay authorities, DSWD, and social workers without court proceedings. If it fails, the victims may file a case. Prescriptions (expiry) of the crime is suspended for up to two (2) years.)

2.) If the penalty is between 6 to 12 years:

Only the court can order a diversion program, but must make sure it's appropriate before the child is arraigned. If diversion isn't going to do, or if the child won't change his ways, the trial proceeds but the sentence is automatically suspended (like there was no penalty at all!)

3.) If the penalty is between 12 to 20 years (or if diversion doesn't work or the child won't change):

The sentence is suspended right away and the court will dismiss the case if the proper disposition requirements have been followed. If the disposition requirements haven't been followed, the child is brought to court for sentencing.

4.) If the penalty is Reclusion Perpetua or Life Imprisonment (they're not the same):

The child can't invoke RA 9344.

Ever since this law was passed, there has been a rise crimes committed by minors. These have included serious ones like smuggling drugs, armed robbery and assault. Criminal syndicates using minors to do their dirty work have been pretty busy. Exploitation of minors is already a crime in the Revised Penal Code. RA 9344 has encouraged it to spread. This is why the courts and law enforcement are worried. If a child aged 15 was given a gun by a syndicate person and told to shoot someone in broad daylight, that child can be let off by the court if he told them that he wasn't even thinking when he fired the shot. Worse still, the same child could be back in the syndicate's hideout the next week for another hit job. This law must be changed.

Anyone else in favor?

Insolvency and Suspension of Payments

Insolvency

There are two (2) kinds of insolvency: voluntary and involuntary. Insolvency is voluntary when a person's liabilities are more than his assets and he goes to court to have himself declared insolvent while having his remaining assets equitably distributed among his creditors. A damage suit will be suspended if a debtor applies for voluntary insolvency (but the court where the damage suit is filed can still set the amount of the damages.) Foreclosure proceedings for real estate mortgage, however, are not suspended when the debtor applies for voluntary insolvency.

An employer can't use this law to skip payments of salaries to his employees (because they're employees, not creditors.) If employees sue their employer for unpaid salaries, the employer can't invoke insolvency against them.

Insolvency becomes involuntary when three (3) or more creditors of the same debtor go to court to have that debtor declared insolvent if he either:

1.) Is trying to leave the country

2.) Is always absent

3.) Hides himself from court processes

4.) Hides or removes his properties

5.) Let his properties get attached (confiscated in another court case)

6.) Confessed or allowed himself to lose a case (the legal wording is "allowed judgment to be taken against him.") This is not the same as #7.

7.) Allowed himself to lose a case by default (didn't show up in court on purpose.)

8.) Let his property be taken by other legal proceedings to give preference to other creditors

9.) Assigned, sold his property or gave it as a gift to another person

10.) Gave or sold the property to another person so he could be declared insolvent and cheat his creditors (not the same as # 9.)

11.) Defaulted in paying his bills for thirty (30) days

12.) Failed to surrender money entrusted to him

13.) If the debtor's property isn't enough to satisfy payments ordered in a court decision

Even if you're declared insolvent, you're only released from debts you had before you were declared insolvent. A person in an insolvency case is insolvent only if the court declares him insolvent. The good news is that future earnings of an insolvent person can't be attacked by his old creditors. There are, however, obligations that a person declared insolvent can't run away from:

1.) Government assessments

2.) Alimonies

3.) Corporate debts

4.) Debts caused by the debtor's fraud, embezzlement or defalcation (misappropriating money entrusted to him.)

5.) Solidary debts with another debtor (a complex type of debt where there are several debtors and the creditor can ask for a part or the whole debt from any or all of them.)

6.) Debts not mentioned in the schedule (list) the debtor submitted to the court

Suspension of Payment

If a debtor has enough to pay all his debts but can't pay all of them when their due dates arrive, he can go to court to ask for a suspension of payments. He must submit the following to the court:

1.) His schedule of debts and property

2.) His statement of assets and liabilities

3.) The proposed agreement

The court will order suspension of payments if at least two-thirds (2/3) of the creditors approve as well as three-fifths (3/5) of liabilities. Once approved, the creditors can't object if the debtor continues to do business and pays his legitimate expenses. Suspension of payment was made to help a debtor pull himself back together so he can pay his creditors when the time comes.

Regarding suspension of payments, remember the following:

1.) Persons foreclosing legal or contractual mortgages can either join the other creditors for suspension of payments or foreclose them independently.

2.) An unsecured creditor's case against a debtor asking for suspension is suspended because secured creditors (like those foreclosing mortgages) are must be given priority -that's the rule.

This has now been repealed by the FRIA.

Justifying Circumstances

Justifying circumstances are instances where a person has no criminal and civil liability. For a justifying circumstance to be accepted, it must be pleaded and proven in court. Philippine courts are passive bodies and only act on the information is given them. The justifying circumstances are:

1.) Self-defense

This includes defense of your property and rights. For a valid plea of self-defense, you must prove that you did not provoke your assailant into attacking you, that there was actual or imminent aggression (a threatening attitude won't do,) and the means to defend yourself were reasonably necessary. Regarding the third requisite, "reasonable necessity" means your self-preservation instincts kick in. What you used may be disproportionately unfair but still valid when you consider the other circumstances (time of day, size of opponent, etc.) and jurists agree that a guy defending himself with a shotgun could invoke self-defense against an attacker armed only with a knife if he could prove that it was the only weapon he had.

Self-defense, however, does not include running after the attacker after you warded him off unless you're a member of the police.

2.) Defense of a relative

Here, reasonable necessity of means and actual or imminent aggression still stand but provocation is modified. The relative may be the one provoked by the attacker but the defender must show that he wasn't provoked by the attacker. An example of this is when a father returns from work to find his daughter being raped. The father kills the rapist by slamming a solid wooden chair on his head while the rapist is still doing his thing.

3.) Defense of a stranger

Once again, reasonable necessity of means and actual or imminent aggression come into play. There is not provocation here. Instead, the defender must not be motivated by hate, revenge or any other evil motive. The stranger may include your boss, subordinate or friend since a stranger is defined as someone who isn't a relative.

4.) State of necessity

This is the only justifying circumstance where a civil liability is present. It happens when somebody does something that causes damage to another person (or his property) in order to avoid any evil thing happening to himself or another person. All of the following must be present:

A person does an evil act which is lesser than the evil thing that he wants to avoid and there is no other practical or harmless way to prevent it. That person must pay a civil liability. If it was done to prevent something evil happening to another person, that other person must pay the civil liability.

5.) Fulfillment of lawful duty/exercise of right/office

The person in question was doing his lawful duty and the injury happened while he was doing it. He must prove that he was the holder of that position when he was performing his duty. This usually happens when the police are in hot pursuit or when a criminal refuses to surrender. It won't apply, unfortunately, to a security guard if he kills a thief who refuses to stop. A security guard's law enforcement power is up to prevention only. A security guard can only kill if he's defending, not pursuing. A prison guard, however, can kill an escaped prisoner.

6.) Obedience to superior order

Here, there is a lawful order and the means to carry it out are lawful. Good faith on the subordinate's part is crucial here. If he honestly believed that the order was legal, he can claim this justifying circumstance -even if the order was illegal. Members of the Armed Forces fall into this category. If, however, the subordinate knew the order wasn't lawful, he can still escape criminal liability if he can prove the exempting circumstances of uncontrollable fear or irresistible force. We'll take that up later. Justifying and exempting circumstances aren't the same.

BP 22

This is a law that very often has cases in court: BP 22, the Bouncing Checks Law.

Issuing checks without anything in your bank account is punishable by a law that isn't part of the Revised Penal Code. It covers all kinds of checks and is in the original jurisdiction of the lower courts (MTC, etc.) These are the following things you have to remember about BP 22:

BP 22 can be committed in 2 ways:

1.) Issuing a check knowing that there is no money (or not enough money)  in the account at the time the check is issued.

2.) Having the money but not maintaining enough money in the account to cover the check when it's brought to the bank within 90 days from its issuance (insufficient funds is a prima facie presumption of knowledge of a lack of funds.)

If the bank won't pay for a lack of funds in the account, the account holder has five (5) days to make good on the check to escape criminal liability. Sufficent funds must be within the account within 90 days from the date the check was presented to the bank. The penalty for violating BP 22 is 30 days to 1 year imprisonment and/or a fine of up to twice the value of the check (but not to exceed Php200,000.00.)

Note: after 180 days the check becomes stale. A stale check will not cause criminal liability if presented for encashment (the issuer of the check can't be sued.) BP 22 can also be subject to mediation.

Defenses Against BP 22

1.) The notice of dishonor wasn't given (remember the 5-day time limit?)

2.) The dishonor of the check wasn't due to insufficiency of funds.

3.) The check was presented for payment after 90 or 180 days from its maturity.

4.) A valid cause to stop payment (ex. right of an installment buyer under PD 957.)

MCIT

The minimum corporate income tax (MCIT) was created to prevent tax evasion. BIR will impose a tax of 2% on the gross income of the corporation if the regular corporate income tax is less than that 2%. It takes effect on the fourth (4th) taxable year after the year the corporation started doing business (five years after business started, in other words.) Excesses of the MCIT over the regular income tax are credited to the regular income tax for the next three (3) taxable years.

It is suspended for the following reasons:

1.) A labor dispute lasting longer than six (6) months

2.) Force majeure (war, natural calamities, etc.)

3.) Legitimate business losses caused by fire, robbery, theft, or other economic reasons determined by the Secretary of Finance.

The following domestic corporations are exempt from MCIT

1.) Proprietary educational institutions (educational institutions that aren't non-stock, non-profit)

2.) Non-profit hospitals

3.) Banks under the foreign currency deposit system

4.) Corporations enjoying tax benefits under the Bases Conversion Development Act (RA 7227) and the PEZA Law (RA 7916)

The following resident foreign corporations are exempt:

1.) International air and shipping companies

2.) Offshore Banking Units

3.) Regional operating offices of resident foreign corporations

4.) Resident foreign corporations enjoying tax benefits under RA 7227 and RA 7916

The MCIT won't apply to non-resident foreign corporations

Creditable and Final Withholding Taxes for Individuals

Creditable withholding taxes come from an individual's gross income. Therefore, they are deducted from income tax or credited to it. Taxes on professional fees, salaries and rental income fall into this category. When taxes are paid out of these incomes, they are to be deducted from the income tax of an individual (remember, a person may have a salary as well as rental or professional income.)

The creditable withholding taxes for individuals are:

1.) Professional fees: 10% if gross income for the year is Php 720,000 or less and 15% if more than Php 720,000. This also holds true for the members of a partnership.

2.) Rental income on real property used in business (like stalls:) 5%

3.) Payment to contractors: 2%

4.) Employee's salaries (must be the tax the employee is supposed to pay.)

Final withholding taxes are separate from gross income and apply to other incomes specifically identified in the tax laws. These are:

1.) Interest on bank deposits: 20% of the interest (you'll see this in your bank passbook every time you earn interest.)

2.) Income from deposit substitutes: 20%

3.) Royalties: 10% if from books, musical compositions and literary works and 20% if from other sources.

4.) Prizes: 20% -but if Php 10,000 or less, it follows the the standard tax bracket rate. See Income Tax Rates for Individuals.

5.) Trust fund and similar arrangements: 20%

6.) Other winnings: 20% (except PCSO and lotto winnings -they're exempt.)

7.) Interest on bank deposits under the expanded foreign currency deposit system: 7.5% (available only to resident aliens as well as resident and non-resident citizens.)

8.) Interest from long-term deposit/investment pre-terminated before the 5th year: 20% is less than 3 years, 12% if less than 4 years and 5% if less than 5 years.

9.) Dividends from shares of stock: 10% for citizens and resident aliens, 20% for non-resident aliens doing business in the Philippines and 25% for non-resident aliens not doing business in the Philippines.

10.) Shares of an individual in a partnership that isn't organized for professional purposes: 10% for citizens and 20% for resident aliens doing business in the Philippines.

11.) Fringe benefits: see De Minimis Benefits vs. Fringe Benefits.

12.) Capital gains from shares of stock not found on the stock exchange: 5% if Php 100,000 or less and 10% if more than Php 100,000.

13.) Gains from sale of real property which are capital assets: 6% of the gross selling price or fair market value, whichever is higher.

Corporate Tax Basics

Beginning January 1, 2009, corporate income taxes were lowered to 30% of net taxable income. Now that should be good for anyone planning to put up a corporation. This rate applies to resident foreign corporations and domestic corporations. Non-resident foreign corporations are taxed at 30% final tax on their gross income. Foreign corporations, whether resident or not, pay taxes on their income from Philippine sources. Domestic corporations, however, must pay taxes on their income from both foreign and local sources. In paying income taxes, domestic and resident foreign corporations can deduct whatever tax credits they have from their income taxes. Non-resident foreign corporations can't do this.

Partnerships are taxed as corporations unless they're organized to allow the members to practice their professions or joint ventures under contract with the government for energy operations or construction.

Shares of stock that are bought and sold at the stock exchange are taxed at 1/2 of 1% of the gross sales regardless of whether or not there is profit. Shares of stock that aren't traded at the stock exchange are only taxable if there is a profit -a final capital gains tax of 5% if there is a net capital gain of Php 100,000 or less and 10% if more than Php 100,000.

Intercorporate dividends are exempt from tax unless paid by a domestic corporation to a foreign one (they get a 15% final withholding tax.) Under the Tax-sparing Principle, however, if the home country of the foreign corporation allows tax credits for taxes paid in the Philippines, or doesn't impose taxes on the dividends, a special tax rate of 15% is imposed on instead of the normal 30% income tax rate.

There is also a special tax, known as "Improperly Accumulated Earnings Tax," which is imposed on corporations on holding and investment companies. The aim of this tax is discourage the formation of corporations whose sole purpose is to receive the dividends of their stockholders from other corporations, and therefore avoid paying taxes. The prima facie evidence that the companies are formed for tax evasion is that they're either holding or investment companies. The tax is 10% on the taxable income in addition to the already-existing 30% corporate income tax. Note the following:

1.) Holding Company -a company whose only activity is holding property and collecting the rentals.

2.) Investment Company -a company that does the same activity as a holding company as well as buys and sells stocks, securities, real estate or other investment property and collects income from investment yields and market fluctuations.

Both companies are liable for IAET. The IAET won't apply if these companies have other forms of business.

IAET is computed by adding taxable income to income exempt from tax, income excluded from gross income, income subject to final tax and net operating loss carry-over deducted; then reduced by dividends actually or constructively paid and income tax paid for the taxable year. IAET doesn't apply to the following corporations:

1.) Publicly-held corporations

2.) Banks and other non-bank financial intermediaries

3.) Insurance companies

Accumulation of corporate profits is proper in the following circumstances:

1.) Retained earnings appropriated for plant expansion

2.) Retained earnings appropriated the corporation's working capital requirements

3.) Retained earnings appropriated to meet the corporation's contractual obligations (such as establishing a sinking fund to retire issued bonds of the corporation 

Penalties and Periods: Principal Penalties

In the Philippine Penal System, there are two (2) kinds of penalties: those provided for in the Revised Penal Code and those mentioned in other laws. Some laws prescribe penalties found in the Revised Penal Code while others provide penalties that are uniquely their own. The Revised Penal Code has two (2) kinds of penalties: divisible and indivisible. Divisible penalties are divided into three (3) periods: minimum, medium and maximum.

The penalties under the Revised Penal Code are:

1.) Death -indivisible, abolished in 2006

2.) Reclusion Perpetua -indivisible, 20 years and 1 day to 40 years

3.) Reclusion Temporal -divisible, min: 12 years & 1 day to 14 years & 8 months, med: 14 years, 8 months & 1 day to 17 years & 4 months, max: 17 years, 4 months & 1 day to 20 years

4.) Prision Mayor -divisible, min: 6 years & 1 day to 8 years, med: 8 years & 1 day to 10 years, max: 10 years & 1 day to 12 years

5.) Prision Correccional and Destierro -divisible, min: 6 months, & 1 day to 2 years & 4 months, med: 2 years, 4 months & 1 day to 4 years & 2 months, max: 4 years, 2 months & 1 day to 6 years

6.) Arresto Mayor -divisible, min: 1 month & 1 day to 2 months, med: 2 months & 1 day to 4 months, max: 4 months & 1 day to 6 months

7.) Arresto Menor -divisible, min: 1 to 10 days, med: 11 to 20 days, max: 21 to 30 days.

The periods of the divisible penalties are further divided into minimum, medium and maximum smaller periods. Destierro is a unique penalty. Instead of being imprisoned, the person punished with destierro is not allowed to come within 25 to 250 kilometers of an area. Fines are also divisible; a light penalty is less than Php 200, a corrective penalty is Php 200 to Php 6,000, and an afflictive penalty is higher than Php 6,000.

Regarding other laws, only those that prescribe Revised Penal Code penalties follow the list above.

The Best Evidence Rule

This is a rule that is as misunderstood as it is misused. The Best Evidence Rule is the lowest in the priority of evidence. Contrary to what its abusers say, it can only be used as a last resort and applies only to documents and their contents. Also, the rule WON'T apply to xerox copies (there's a case on that, CIR vs. Hantex 454 SCRA 301) if the original can't be found. Basically the Best Evidence Rule is about using a document to prove another document. It can only be used to prevent fraud as well as mistakes in interpretation.

The Best Evidence Rule can only be used when an original document has either been lost or destroyed without the fault of the person offering it, is in the hands of the other party in the case, consists of a lot of materials that can be examined only after a long (long!) period of time, or if it is a public document in the hands of a government person/office.

For the BIR, the only valid way to use the rule is to make inquiries with other people and businesses that the taxpayer did business with. The only times it can do this is if the taxpayer submits a fake tax return or if the return isn't submitted within the time prescribed by law.

Remember this: even if you're on the correct side in a trial, you could lose if you don't object when the other side uses the Best Evidence Rule. If you don't object if the other side shows a xerox copy, you could lose a case.

Tax Compromises and Cancellations

There are instances where taxes can be compromised, or even canceled by the Commissioner of the BIR.

For a compromise to happen, the following things must be present:

1.) The tax assessment is doubtful

2.) The taxpayer can't pay because of his financial situation

Compromises may happen in the following instances:

1.) Delinquent accounts

2.) There is an ongoing administrative tax protest case

3.) A civil case in court involving taxes

4.) A court case involving tax collection

5.) A criminal violation that hasn't been filed in court,

6.) A criminal case where there is no tax fraud.

Taxes can't be compromised in the following instances:

1.) Withholding tax cases

2.) Criminal cases where there is tax fraud

3.) Criminal violations already in court

4.) Delinquent accounts with schedules approved by the BIR

Remember: A case isn't a case until it gets to court.

The BIR Commissioner may cancel a tax liability if assessment was excessive and the costs of collecting that particular tax are greater than the tax itself. So if you were given an assessment of Php 3 Million when you owe the government only Php 10,000, all the money you have is in a rural bank with no internet connections and located right in the middle of a warzone and there's a lot of gunfire between rebel and government forces there, you can ask the BIR for a cancellation.

Illegal Local Tax Ordinances

The Local Government Units (provinces, cities, municipalities and barangays -yes, even the barangays) have the power to raise their own taxes. They do this by passing ordinances. If an ordinance is unjust, illegal or unconstitutional, it can be attacked in this way:

1.) Within thirty (30) days from the day the tax ordinance becomes effective, the taxpayer must appeal to the Secretary of the Department of Justice. The Secretary has sixty (60) days to decide.

2.) If the Secretary of the DOJ doesn't act on the appeal or rules against it, the taxpayer has thirty (30) days to file a Declaratory Relief case at the Regional Trial Court. Remember, the 30-day period begins on the sixty-first (61st) day if the Secretary did nothing; and, if he did and ruled against the taxpayer, on the day after the taxpayer received the decision.

3.) The rest follows the usual pattern: if you don't like the RTC's decision, go to the Court of Appeals. If you don't like the CA's decision, go to the Supreme Court. If you don't like the Supreme Court, there's nothing you can do. Supreme Court decisions, however unfair, become part of the law of the country.

Bank Basics

The General Banking Law (RA 8791) defines a bank as an entity that lends money from deposits it obtains from the public. "Public" refers to twenty (20) ore more people.

A quasi-bank (also known as a finance corporation) borrows money from the public through deposit substitutes which it lends or uses to buy receivables or other obligations.

Banks and quasi-banks have the following requirements:

1.) They must be stock corporation. The must be of par value. Banks can't buy their own shares or accept them as security for a loan unless authorized by the Monetary Board of the Central Bank. If allowed, they must be sold or disposed of within six (6) months of purchase or acquisition.

2.) Its money must come from the public. Remember the definition of "Public."

3.) It must meet the minimum requirements prescribed by the Monetary Board for the category it belongs to (thrift, rural, commercial...)

4.) The Board of Directors should have a minimum of five (5) and a maximum of fifteen (15) members, two (2) of whom should be independent (meaning someone who isn't an officer of the bank, its subsidiaries, affiliates or related interests.

Banks cannot go into the insurance business. Hiring casual employees for positions involving deposits in also prohibited. Banks are also not subject to Central Bank Circular 416; other rules dictate their interest rates on loans.